Wednesday, November 25, 2015

"Storage technology remains one of the most innovative and exciting aspects of our energy policy, particularly because of the incredible potential it presents. It will help strengthen our system and improve service to electricity consumers," said Bob Chiarelli, Minister of Energy. "Our government is proud to see the leadership of these five Ontario companies as they move forward to create good jobs and invest in their local economies.""The energy storage market is maturing," said Bruce Campbell, President and CEO of the IESO. "Now that we have completed our two-phase procurement process for a total of 50 MW of new energy storage in Ontario, we look forward to having these facilities up and running. These projects will help us better understand how energy storage technologies can support the operation of the grid by providing much needed quick response and operational flexibility."

There is a reason I no longer treat "IESO" as an acronym - there's functionally no "I" and whatever the "ESO" is, it isn't the body's original MO.

The IESO press release does provide a rationale for the contracts:

This latest set of contracts... is focused on the capacity value – the ability to be available to store energy and provide it back when called upon – and the arbitrage value – the ability to store energy during periods of lower prices and inject it back into the electricity system when prices rise – of energy storage.

Monday, November 23, 2015

...we must not triple-count the energy promised by renewables: they cannot supplant existing fossil fuel use and replace decommissioned nuclear plants and meet the skyrocketing needs of the developing world.

...traditional greens have been distracted by their signature causes, and in doing so have themselves denied some inconvenient truths.The first is that, until now, fossil fuels have been good for humanity. The industrial revolution doubled life expectancy in developed countries while multiplying prosperity twentyfold. As industrialization spreads to the developing world, billions of people are rising out of poverty in their turn — affording more food, living longer and healthier lives, becoming better educated, and having fewer babies — thanks to cheap fossil fuels. In poor countries like India, citizens want reliable electricity to power these improvements, and stand ready to vote out any government that fails to deliver it. When American environmentalists tell the world to stop burning fossil fuels, they need to give Indians an alternative that delivers the prosperity they demand and deserve.

That brings us to the second inconvenient truth: Nuclear power is the world’s most abundant and scalable carbon-free energy source. In today’s world, every nuclear plant that is not built is a fossil-fuel plant that does get built, which in most of the world means coal. Yet the use of nuclear power has been stagnant or even contracting.

Wednesday, November 18, 2015

The Ontario Energy Board has a significant impact on what Ontario ratepayers are charged for energy. In recent years the cost of electricity has soared while the price of gas has not. Now the government whose intervention has cost Ontarians steeply is similarly threatening to micromanage the gas industry into escalating rates.

Let's start with electricity and the the ongoing quest for a holy grail of pricing structures. After a full implementation of smart meters over more than a decade at a cost of billions, the OEB has advanced to the stage of knowing it is structurally impossible for them to introduce a coherent pricing model:

REGULATORY BARRIERS TO THE EFFECTIVENESS OF RPP

TOU pricing is intended to incent consumers to change their pattern of consumption and enhance electricity system efficiency. The original RPP methodology and objectives outlined in the RPP Manual were designed to support those objectives. However...

Changes to Regulation 95/05 would be required to provide this kind of flexibility to develop options.

and

Misalignment of the Global Adjustment Recovery

Changes to the current regulation are needed to address [the] lack of consistency in the approach to recovery of [Global Adjustment] among Class B consumers.

The document basically sets requirements that the OEB feels need to be met to allow it to experiment further on Ontario ratepayers.

George Vegh I understand to be a respected voice on Ontario Electricity matters and the laws related to them.
Canadian Energy Perpectives is a blog by legal firm McCarthy Tetrault.

This is not a post I'd expect somebody like Vegh to write on a blog that generally reads exactly like you'd expect a legal blog to read:

On October 28, 2015, the Government of Ontario tabled Bill 135, that will, if enacted, effectively remove independent electricity planning and procurement authority from the IESO and transmission approval from the OEB. Both of these types of authority will be transferred to the Minister of Energy. The Minister will produce long-term energy plans that will be binding on the Ontario Energy Board and the IESO, both of whom must issue implementation plans designed to achieve the objectives of the Government’s plan. The Government’s new planning authority is broader than the IESO’s. It includes both bulk system planning (as was in the IESO’s mandate), and also extends to distribution systems. The Government’s existing procurement authority will also be extended as Bill 135 gives the Government additional powers to direct the procurement of energy storage and transmission. The net result of Bill 135 is therefore to ensure that the main energy institutions – the IESO and the OEB – are focused almost exclusively on implementing Government plans and directives. The Government has always been steering the direction of energy policy. It is now rowing as well: it is in direct control of every policy instrument available. From a governance perspective, it could lead one to wonder whether there are any checks and balances left in the system at all.
Bill 135 raises a number of questions for both the agencies and the Government. Some of them are:

What is the residual independent authority of the agencies? ...

What is the criteria and process by which the Government will develop plans and directives? ...

SCRIBA, N.Y. – Entergy Corp. plans to shut down its money-losing FitzPatrick nuclear power plant in Oswego County after the reactor runs out of fuel next year.
Entergy officials called a meeting of employees today to announce that the company will not install more enriched uranium fuel rods next September, which would be required to continue operating the facility.
Barring some unexpected intervention by state officials, the 850-megawatt facility will shut down in late 2016 or early 2017 and begin laying off its 615 employees.